Supreme Court upends top patent court’s “burden of proof” rule

The burden of proving infringement is always on a patent owner, high court says.

In patent disputes, it's the patent holder—not the accused infringer—who must always bear the burden of proof. That's true even when the parties had struck a licensing deal in the past, the US Supreme Court made clear in a ruling published today.

The case decided was Medtronic, Inc. v. Mirowski Family Ventures. Michel Mirowski and co-inventor Morton Mower were pioneers in the area of implantable heart-stimulation devices (pacemakers). Medtronic paid royalties to Mirowski for some of its products, harking back to its first licensing deal in 1991. But the company said a new generation of devices didn't infringe, and it resisted paying for additional patents Mirowski had acquired in 2003 and 2007.

Mirowski, no surprise, disagreed. The two parties went to court, with Medtronic firing the first shot: a so-called "declaratory judgment" lawsuit saying that it didn't infringe Mirowski's patents.

The situation escalated last year, when the US Court of Appeals for the Federal Circuit, the nation's top patent court, ruled that the burden of proof in that dispute should actually be on Medtronic, not Mirowski, as the lower court had ruled.

Today the Federal Circuit was overruled, in a 9-0 decision written by Justice Stephen Breyer. The burden is always on the patent holder to prove infringement, he explained—even in a situation where in the past, the accused infringer agreed to take a license.

Since patent licensing is so common in the tech sector, the case will have implications beyond the devices at issue. It will generally offer a slight tip of the scales of power, away from companies that want to enforce their patents and in favor of companies that want to challenge those patents.

While it will have an impact on competitors who license patents to each other, it probably won't make much difference in the many battles over the patent-licensing shops called "patent trolls." Most settlements with non-practicing patent holders are onetime, lump sum payments, not ongoing royalties like Medtronic was paying to Mirowski.

Supreme Court patent slapdown has sequels on the way

The situation for licensees that wanted to challenge patents actually used to be much worse. Until 2007, someone who'd agreed to a patent license typically was not allowed to challenge the patents at all; if the patents were agreed to once, essentially, they were agreed to forever.

The situation changed when the Supreme Court stepped in to override the Federal Circuit in the Medimmune v. Genentech case.

But while the Federal Circuit was allowing licensees to challenge patents, as the Supreme Court told it to, in today's decision Breyer noted that the Federal Circuit had allowed Medtronic to have its day in court, but it was still creating a "significant obstacle" and making the process "disadvantageous" for Medtronic.

Today's decision is one of several in recent years in which the Supreme Court has struck down Federal Circuit rules that were seen as too friendly to patent owners.

This first 9-0 decision doesn't bode well for the Federal Circuit. Today's Medtronic case is the first of several big Federal Circuit rulings that the Supreme Court is reviewing. Predicting outcomes is a loser's game, but they presumably didn't take up the cases because they're thrilled with the status quo.

The high court has shown an unprecedented interest in patents this year. There are four more patent cases still to be argued in front of the justices, a remarkable number. There's Alice v. CLS Bank, a case that seeks to bring order out of chaos when it comes to the law around software patents; Limelight v. Akamai, which will resolve questions around "divided infringement;" Nautilus v. Biosig, grappling with what kinds of patents are written too vaguely; and the twin cases Highmark v. Allcare and Octane Fitness v. Icon Health, two cases that are being heard together, which will determine when attorney's fees can be awarded in a patent case.

A reasonable decision, it appears; baby steps toward a more sane system.

It's really more along the lines of returning the system to the way it was before the Federal Circuit stepped in to make things easier for the patent holder. Even for patent attorneys, this overturned rule was somewhat weird and an outlier, because flipping the burden of proof as the Fed. Cir. did is no small thing in practical terms. The PatentlyO analysis (as usual, concise and clear) is here.

So the burden of proof has been laid back on the shoulder of those who run around in mobs screaming to burn witches. Now, if we could only get rid of the duck we'll be in good shape.

TRANSLATION : You can no longer scream infringement and sit back while some poor sap tries to prove that his driving an automobile doesn't infring on your method of pressing buttons on a mobile device. Now if they'll get rid of the assumption of validity we'd be doing good.

I'm a little less pessimistic about the courts than some people here, so I am not surprised they ruled this way. I am shocked at the 9-0 though.

I wonder if all the patent-related cases may end up being reported as 9-0. If none of the justices feel strongly against the main group there may be a wish to present a unified front on these issues since they took so many this session.

Patent reform has been a long time coming, and it is (slowly) actually gaining some traction in the minds of the public and the elected officials. Sadly, a lot of this pressure is coming from established companies who want to protect their right to litigate on behalf of their patents while protecting themselves from the non-producing entities. The system still needs a massive overhaul, but at least this gives us a nudge in the right direction. And the Supreme Court does love a series of small changes as opposed to a massive one, so a 9-0 decision here could provide context for future rulings.

When nine Supreme Court Justices, who ordinarily wouldn't agree on the color of an orange, all say that you are wrong then it is time to take a long hard look at what you are doing.

I agree, however, the counterargument from the Federal Circuit judges would be, "You don't see these cases every day, you don't think about the policy ramifications every day, and you haven't been doing this nearly as long as us so you don't remember what an economic loss slipshod intellectual property protection created before the Federal Circuit was formed."

The Federal Circuit is, on some levels, mentally trapped by its jurisdiction, always focusing on patent law and thus valuing the intricacies and subtleties of patent law perhaps more than is wise for broader economic policy. I'm not saying correction of perspective / regression back to the norm is bad, but there is a point to having this focused expertise.

(Well, expertise and the fact that back in 1982, none of the other Circuits wanted to do patent law anymore, the Circuits didn't agree on how patents were enforced even though a patent is a legal document with Federal scope, and the Supreme Court didn't want to have all of its docket dealing with Circuit splits on patent law.)

When nine Supreme Court Justices, who ordinarily wouldn't agree on the color of an orange, all say that you are wrong then it is time to take a long hard look at what you are doing.

I agree, however, the counterargument from the Federal Circuit judges would be, "You don't see these cases every day, you don't think about the policy ramifications every day, and you haven't been doing this nearly as long as us so you don't remember what an economic loss slipshod intellectual property protection created before the Federal Circuit was formed."

Presumably the counter-counterargument from the Supreme Court justices would be to ask if the CAFC judges are touched in the head, to have thought that it was ever acceptable to put the burden of proof on the accused, rather than the accuser. That's a basic principle of our courts! Patent law and its ramifications doesn't enter into it, imnsho.

The article here didn't do a great job of explaining the facts of the case. Medtronic had licensed some of Mirowski's patents, but believed that some of the new products they were developing didn't fall under the scope of the patents (and therefore, Medtronic believed they wouldn't owe royalties on the new products). When they informed Mirowski of this, Mirowski disagreed and more or less threatened to sue for breach of contract (i.e., for not paying royalties on the new products). So, Medtronic sued first for declaratory judgment (DJ) of noninfringement.

The trick here is that in a normal DJ patent case, the patentee is compelled to countersue for infringement (basically, the DJ suit makes a patentee who has threatened legal action actually put their patents where their mouth is). But in this particular case, because of the prior licensing agreement, Mirowski was precluded from suing Medtronic for infringement over these patents (they could only sue for breach of contract, not infringement). So, given that normal practice is that a plaintiff has the burden of proof, but Mirowski was clearly not a plaintiff in this case, there was a problem figuring out where the burden of proof should fall.

SCOTUS said that those details don't actually make a difference, and that regardless of whether Mirowski is an actual plaintiff bringing their own complaint, as the patentee, they're still responsible for proving infringement of their patent in this situation. If they weren't ready to do so, they should wait before causing the issue to become ripe for the DJ suit by not threatening to sue (yet) in the first place.

So the burden of proof has been laid back on the shoulder of those who run around in mobs screaming to burn witches. Now, if we could only get rid of the duck we'll be in good shape.

TRANSLATION : You can no longer scream infringement and sit back while some poor sap tries to prove that his driving an automobile doesn't infring on your method of pressing buttons on a mobile device. Now if they'll get rid of the assumption of validity we'd be doing good.

When nine Supreme Court Justices, who ordinarily wouldn't agree on the color of an orange, all say that you are wrong then it is time to take a long hard look at what you are doing.

I agree, however, the counterargument from the Federal Circuit judges would be, "You don't see these cases every day, you don't think about the policy ramifications every day, and you haven't been doing this nearly as long as us so you don't remember what an economic loss slipshod intellectual property protection created before the Federal Circuit was formed."

The Federal Circuit is, on some levels, mentally trapped by its jurisdiction, always focusing on patent law and thus valuing the intricacies and subtleties of patent law perhaps more than is wise for broader economic policy. I'm not saying correction of perspective / regression back to the norm is bad, but there is a point to having this focused expertise.

(Well, expertise and the fact that back in 1982, none of the other Circuits wanted to do patent law anymore, the Circuits didn't agree on how patents were enforced even though a patent is a legal document with Federal scope, and the Supreme Court didn't want to have all of its docket dealing with Circuit splits on patent law.)

The Federal Circuit hears more than just patent cases, but in any case they "argue" their point through the text of their rulings, which the Supreme Court found unconvincing.

The Ninth Circuit also gets a lot of these slaps from the Supremes, with the result being an eventual course correction to rulings that stand up on appeal.

So the burden of proof has been laid back on the shoulder of those who run around in mobs screaming to burn witches. Now, if we could only get rid of the duck we'll be in good shape.

TRANSLATION : You can no longer scream infringement and sit back while some poor sap tries to prove that his driving an automobile doesn't infring on your method of pressing buttons on a mobile device. Now if they'll get rid of the assumption of validity we'd be doing good.

I really wonder how many people got your duck reference.

Who wouldn't? There's only a few things that float afterall, wood, very small rocks, etc.

So the burden of proof has been laid back on the shoulder of those who run around in mobs screaming to burn witches. Now, if we could only get rid of the duck we'll be in good shape.

TRANSLATION : You can no longer scream infringement and sit back while some poor sap tries to prove that his driving an automobile doesn't infring on your method of pressing buttons on a mobile device. Now if they'll get rid of the assumption of validity we'd be doing good.

I really wonder how many people got your duck reference.

Who wouldn't? There's only a few things that float afterall, wood, very small rocks, etc.

(Well, expertise and the fact that back in 1982, none of the other Circuits wanted to do patent law anymore, the Circuits didn't agree on how patents were enforced even though a patent is a legal document with Federal scope, and the Supreme Court didn't want to have all of its docket dealing with Circuit splits on patent law.)

The Federal Circuit hears more than just patent cases, but in any case they "argue" their point through the text of their rulings, which the Supreme Court found unconvincing.

Yes, the Fed. Cir. also regularly hears appeals of government contract cases from the Court of Federal Claims and Veterans Affairs cases from the VA, but the vast majority of the Fed. Cir. time, effort, and interest is focused on patent law. (Says this as a patent attorney with several friends who have served / are serving as judicial clerks on the Fed. Cir.)

I mean this makes sense to me, as a layman - isn't it supposed to be the founding principal of justice that an accusation must be proved - innocent until proven guilty?

Also, I think it's significant that this was a NINE to ZERO decision. The SCOTUS doesn't seem like they could agree whether it's cold outside in a nine to zero decision. How is it even POSSIBLE that the Court of Appeals for the Federal Circuit could get it so wrong that they are overturned by a *Unanimous* decision? I mean, that means there is zero controversy among the SCOTUS about the issue at hand.

I know that the court quite often has unanimous decisions, far more regularly than many people suspect, since it's the controversial cases that get the most news. However, reading the sentence that said this one was unanimous instantly filled me with great pleasure.

So the burden of proof has been laid back on the shoulder of those who run around in mobs screaming to burn witches. Now, if we could only get rid of the duck we'll be in good shape.

TRANSLATION : You can no longer scream infringement and sit back while some poor sap tries to prove that his driving an automobile doesn't infring on your method of pressing buttons on a mobile device. Now if they'll get rid of the assumption of validity we'd be doing good.

I really wonder how many people got your duck reference.

About as many as throw really small rocks. Or get swords thrown at them by watery tarts.

I mean this makes sense to me, as a layman - isn't it supposed to be the founding principal of justice that an accusation must be proved - innocent until proven guilty?

Also, I think it's significant that this was a NINE to ZERO decision. The SCOTUS doesn't seem like they could agree whether it's cold outside in a nine to zero decision. How is it even POSSIBLE that the Court of Appeals for the Federal Circuit could get it so wrong that they are overturned by a *Unanimous* decision? I mean, that means there is zero controversy among the SCOTUS about the issue at hand.

Not really, 9-0 decisions aren't that uncommon, the court just splits along partisan lines for hotbutton issues. This on the other hand is pretty uncontroversial, other than the trolls themselves and apparently the Federal Circuit no one likes the current patent situation. A few calls were probably made by the executive as well, they are all against patent trolls now and would like anything but the NSA to be a headline.

I mean this makes sense to me, as a layman - isn't it supposed to be the founding principal of justice that an accusation must be proved - innocent until proven guilty?

Also, I think it's significant that this was a NINE to ZERO decision. The SCOTUS doesn't seem like they could agree whether it's cold outside in a nine to zero decision. How is it even POSSIBLE that the Court of Appeals for the Federal Circuit could get it so wrong that they are overturned by a *Unanimous* decision? I mean, that means there is zero controversy among the SCOTUS about the issue at hand.

Not really, 9-0 decisions aren't that uncommon, the court just splits along partisan lines for hotbutton issues. This on the other hand is pretty uncontroversial, other than the trolls themselves and apparently the Federal Circuit absolutely no one like the current patent situation.

I will say that when a "burden of proof" question comes up, it's always the accuser that is required to show proof of the accusation. This seems like one of the easy ones for the Supremes - and is the first salvo in a "what are you thinking" slap to the Appeals Court. We'll see how unanimous the rest of the patent decisions are, but based on the number of accepted appeals, I'd guess there's going to be some more slap downs coming.

Well this is nice for businesses but us individuals still get forced to decrypt our data, thus forcing us to provide the proof (or lack-thereof). Until something is done about that you'll have to forgive me if I just give this article a grin and nod.

So the burden of proof has been laid back on the shoulder of those who run around in mobs screaming to burn witches. Now, if we could only get rid of the duck we'll be in good shape.

TRANSLATION : You can no longer scream infringement and sit back while some poor sap tries to prove that his driving an automobile doesn't infring on your method of pressing buttons on a mobile device. Now if they'll get rid of the assumption of validity we'd be doing good.

I really wonder how many people got your duck reference.

About as many as throw really small rocks. Or get swords thrown at them by watery tarts.

How truly sad someone downvoted our quotes. Must not be a fan of good movies...

I'm a little less pessimistic about the courts than some people here, so I am not surprised they ruled this way. I am shocked at the 9-0 though.

Yeah, the Supremes seem to have gotten somewhat tired of the Federal Circuit thumbing their noses at them. Apparently, the judges on the Federal Circuit seemed to have forgotten that you get in a pissing match with a higher court and you're going to lose. A 9-0 decision is pretty clearly saying, "Stop lawyering around our orders."

So the burden of proof has been laid back on the shoulder of those who run around in mobs screaming to burn witches. Now, if we could only get rid of the duck we'll be in good shape.

TRANSLATION : You can no longer scream infringement and sit back while some poor sap tries to prove that his driving an automobile doesn't infring on your method of pressing buttons on a mobile device. Now if they'll get rid of the assumption of validity we'd be doing good.

The Fed. Cir. only said the burden was on the alleged infringer in declaratory judgment cases. DJ is when you sue someone preemptively to say they don't have a case/right/patent. It reverses the normal court proceeding.

The Fed. Cir. got it wrong because they over relied on "the plaintiff has the burden" rule which is the default rule. In DJ cases the plaintiff is sort of switched around from the default, they are asking to be found to not infringe.

SCOTUS reminded them that it's really only a technicality. That the defendant in a declaratory judgment is really the one asserting a claim.

The case isn't really that important, but SCOTUS was 100% right in taking it. The Fed. Cir. decision was pretty stupid.

Presumably the counter-counterargument from the Supreme Court justices would be to ask if the CAFC judges are touched in the head, to have thought that it was ever acceptable to put the burden of proof on the accused, rather than the accuser. That's a basic principle of our courts! Patent law and its ramifications doesn't enter into it, imnsho.

I don't think it's as clear cut as that. This was someone who was licensing the patents for a product, then they stopped licensing but continued selling the product.

The exact details of how the product works are a trade secret, so the patent holder cannot investigate without the court's help, and the court decided to help by asking the defendant to explain itself.

As a precedent applied like a big stick to other cases, it's terrible. But as an individual case it wasn't so bad. At first glance it certainly looked like the defendant was going to be found guilty.

This wasn't a patent troll asking everyone under the sun to prove they don't violate the patent, this was two big corporations who had a prior business arrangement that fell apart, and the only way to solve it was a court case, and while the patent holder didn't have proof they did have strong evidence.

This will be interesting because in many cases to determine if someone is infringing means that you have to reverse engineer and then hope you won't run afoul of the DMCA anti-circumvention clause during your infringement investigation.

I found it profoundly amusing to look at last week's article about the Supreme Court refusing to review Soverain v. NewEgg, essentially putting the last nail in the coffin for Soverain's "Shopping Cart" patent, in light of this ruling.

One of Soverain's co-owners was quoted in the article:

Quote:

Wolanyck's statement concludes: “Our nation’s patent system was created so that inventions could be protected by patents, and patent owners would have the right to license those inventions. It is a travesty that an infringer can wholly fail to meet its burden of proof at trial and then an appellate court can nonetheless invalidate those same patents. It is a tough time to be a patent owner.”

It amuses me greatly that Wolanyck feels that the accused must prove their innocence ("meet its burden of proof"), when this ruling now definitively requires that the plaintiff prove their case before the defense has to lift a finger, thus bringing Patent law in line with the rest of the body of law.

The article here didn't do a great job of explaining the facts of the case. Medtronic had licensed some of Mirowski's patents, but believed that some of the new products they were developing didn't fall under the scope of the patents (and therefore, Medtronic believed they wouldn't owe royalties on the new products). When they informed Mirowski of this, Mirowski disagreed and more or less threatened to sue for breach of contract (i.e., for not paying royalties on the new products). So, Medtronic sued first for declaratory judgment (DJ) of noninfringement.

The trick here is that in a normal DJ patent case, the patentee is compelled to countersue for infringement (basically, the DJ suit makes a patentee who has threatened legal action actually put their patents where their mouth is). But in this particular case, because of the prior licensing agreement, Mirowski was precluded from suing Medtronic for infringement over these patents (they could only sue for breach of contract, not infringement). So, given that normal practice is that a plaintiff has the burden of proof, but Mirowski was clearly not a plaintiff in this case, there was a problem figuring out where the burden of proof should fall.

SCOTUS said that those details don't actually make a difference, and that regardless of whether Mirowski is an actual plaintiff bringing their own complaint, as the patentee, they're still responsible for proving infringement of their patent in this situation. If they weren't ready to do so, they should wait before causing the issue to become ripe for the DJ suit by not threatening to sue (yet) in the first place.

Thanks. It now makes sense to me why the Circuit court ruled the way they did (since Mirowski wasn't considered the plaintiff).

I mean this makes sense to me, as a layman - isn't it supposed to be the founding principal of justice that an accusation must be proved - innocent until proven guilty?

Also, I think it's significant that this was a NINE to ZERO decision. The SCOTUS doesn't seem like they could agree whether it's cold outside in a nine to zero decision. How is it even POSSIBLE that the Court of Appeals for the Federal Circuit could get it so wrong that they are overturned by a *Unanimous* decision? I mean, that means there is zero controversy among the SCOTUS about the issue at hand.

Not really, 9-0 decisions aren't that uncommon, the court just splits along partisan lines for hotbutton issues. This on the other hand is pretty uncontroversial, other than the trolls themselves and apparently the Federal Circuit absolutely no one like the current patent situation.

I will say that when a "burden of proof" question comes up, it's always the accuser that is required to show proof of the accusation. This seems like one of the easy ones for the Supremes - and is the first salvo in a "what are you thinking" slap to the Appeals Court. We'll see how unanimous the rest of the patent decisions are, but based on the number of accepted appeals, I'd guess there's going to be some more slap downs coming.

But as pointed out earlier the accuser is the defendant and the defendant is the accuser. The federal court saw Medtronic as the instigator of the court case (the best defence is a strong offence and all that) as they sued first and therefore the burden of proof was on Medtronic so you are actually saying you agree with the Federal Court when you are meaning you agree with the Supreme court.

This is very much the letter of the law vs an interpretation of the spirit of the law.

This is very much the letter of the law vs an interpretation of the spirit of the law.

The "letter of the law" does not match the realities of the modern era. Courts have no choice but to go with their interpretation of the spirit of the law, because that's the only way to make it work at all.